The government’s super guarantee amnesty has now officially ended. If your business applied to the ATO and the application was received on or before the cut-off date of 7 September, your work isn’t done yet. Remember, to retain the benefits of the amnesty, your business is required to either pay the amount in full or enter into and adhere to a payment plan for any unpaid amounts.
So, if the ATO has advised your business that the disclosure you made was eligible for the amnesty, you must pay the super guarantee charge (SGC) amount disclosed in the amnesty application directly to the ATO. It shouldn’t be paid to your employees’ super funds or through a clearing house.
Due to the current economic situation, it is understandable that many businesses are unable to make such payments in full. If your business finds itself in that situation, you can contact the ATO to establish a payment plan which allow you to retain the benefits of the amnesty. According to the ATO, payment plans include arrangements which have flexible payment terms and amounts and can be adjusted if your circumstances change.
If you’re on a payment plan, keep in mind that you can only claim a tax deduction for eligible amnesty payments made from 24 May 2018 to 7 September 2020. Any payments made after 7 September are not tax deductible.
In situations where businesses are unable to maintain the agreed upon payment plan, the ATO notes that they will be disqualified from the amnesty and any amnesty benefits will be removed for unpaid quarters. Businesses will be notified in writing that their disclosure is disqualified from the amnesty and will have to pay the usual administrative and other penalties.
If your business made an application for amnesty that was received by the ATO after 7 September 2020, it will be treated as a standard lodgement of a SGC statement. The ATO will notify your business in writing of the quarters that aren’t eligible for the amnesty and charge you the administration component of $20 per employee per quarter. In addition, the ATO will consider your individual circumstances and decide whether the Part 7 penalty (up to 200%) should be remitted.
The ATO has recently outlined a 4-step penalty remission process including consideration of a business’ attempt to comply with SGC obligations, compliance history, other mitigating factors and circumstances (eg voluntary action prior to compliance action, illness of key employee etc), and any exceptional circumstances (eg natural disaster, severe illness etc).